Decision on IMF loan tranche likely next month

The decision on the release of the next tranche of the IMF’s $5.5 billion loan will be made within the next month as the two sides endeavour to iron out disagreements over some of the conditions, said Finance Minister Amir Khosru Mahmud Chowdhury yesterday.

The discussions may continue for 15 to 20 days or at most a month, he told reporters at his Secretariat office upon his return from the International Monetary Fund-World Bank Spring Meetings in Washington, DC.

“After that, depending on where the talks stand, we will decide the next course of action.”

The details of the discussions cannot be disclosed at this stage.

“Whether we will get the IMF loan by June or July is a misconception.”

The IMF programme began during the previous Awami League government, which, he said, was unelected.

The programme contains many conditions that may not be acceptable to the new BNP government, he said.

“We are an elected government. We will not accept any condition that goes against public interest. This programme will end in six to seven months, after which we will decide whether to continue further.”

Regarding loan conditions in general, he said: “It is a matter of mutual agreement. There is no charity here. These are business transactions and that must be kept in mind.”

About emergency funding to manage the inflated energy bills as a result of the Middle East crisis, he said discussions with the WB, the Asian Infrastructure Investment Bank and the Asian Development Bank are almost complete, while talks with the IMF are ongoing.

The government must consider whether accepting conditions would create pressure on the people or businesses before making a decision, he said.

Khosru dismissed claims that fuel oil prices were raised under pressure from the IMF as part of the negotiations for the release of the loan tranche.

“Let me state clearly: there is no connection between the IMF and the fuel price hike. When the oil prices were being adjusted worldwide, we did not raise prices considering public interest.”

The US doubled the fuel price, while Sri Lanka raised it by 25 percent, according to Khosru.

“Compared to that, our price hike was much less.”

Asked whether the fuel price hike would fuel inflation, he said: “It may increase or it may not. If the supply side remains stable, then prices may not rise.”

On whether the Family Card programme was a flashpoint in the negotiations with the IMF, he said: “The Family Card is a social welfare programme of the current government. There is no issue of excluding it to fulfil any condition. All development partners have appreciated it and received it very positively.”